County bracing for 2010 with cuts

Wednesday

Feb 25, 2009 at 9:37 AM

STOCKTON - The San Joaquin County Board of Supervisors made $2.4 million more in midyear budget cuts Tuesday in anticipation of slipping revenue and rising costs creating an $83 million hole in next year's budget.

Zachary K. Johnson

STOCKTON - The San Joaquin County Board of Supervisors made $2.4 million more in midyear budget cuts Tuesday in anticipation of slipping revenue and rising costs creating an $83 million hole in next year's budget.

But this second round of midyear adjustments pushed the county's emergency fund to more than $46.3 million, and the board's action at Tuesday's meeting also moved more than $21 million from its capital improvement fund back into the county's general fund to prepare for the next fiscal year, which begins in July.

Plummeting housing prices and the slumping economy are expected to decrease the county's revenue from property taxes by $34.2 million and from sales taxes by $18.5 million next year, according to county staff.

"This is an unprecedented decline," County Administrator Manuel Lopez said.

This is the second time this fiscal year the county has tinkered with its $1.28 billion budget. In November, the supervisors made changes, including shoring up the contingency fund with $6.1 million worth of cuts.

Cost increases next year stem from a $22.5 million increase in salaries and benefits and a $7.7 million increase in the county's contribution to the employee retirement fund because of significant investment loss.

Officials said layoffs are possible next year, but representatives from the county's largest labor union are talking with the county to develop possible cost-saving options, including deferring cost-of-living increases, outsourcing county services and employee furloughs, according to the county.

"I believe we all share the same thinking and philosophies," said Ulysses Madison, a representative of Service Employee International Union. And those are preventing layoffs and preserving services, he said.

The SEIU represents about 70 percent of the county's work force, which consists of 6,132 full-time positions. There are 10 employee organizations divided into 14 bargaining units.

Also, the county plans to notify community-based organizations receiving $1.5 million from the county this year that contributions next year will be severely reduced or eliminated.

But for this fiscal year, the bursting housing bubble already is taking its toll on some county departments. The number of building permits issued in the second quarter was down 17 percent from the year before, and 42 percent below that period in 2005-06. Developer-related fees are projected to be $1.6 million below budget this year, and cost-cutting still would leave an $872,000 gap in the Community Development Department by the end of June, according to county staff. Closing this gap could initiate layoff proceedings, but that would require further board action.

Supervisors heard how measures approved in November were keeping costs down. There are 537 vacant positions, in part because of a hiring freeze, and terminated services for 450 cell phones are saving about $12,500 a month, according to staff.

"When we do budget cuts, there are some cuts that are necessary and some that are symbolic - and I believe in both," Supervisor Steve Bestolarides said. The cell phone cuts show the right mind-set, he said.

The $2.4 million in cuts represent a shaving of 0.5 percent to 2.5 percent of budgets from most county departments, according to the county.

These new cuts reduce the Sheriff's Office budget by about $450,000, Sheriff Steve Moore said.

"This is going to be tough to do," he said. The fat was trimmed in the first midyear cuts, which reduced his budget by $1.1 million to about $115 million, he said.

But the cuts won't affect the number of patrols in the county, Moore said, adding he doesn't anticipate layoffs next year, either.

"While I might not be able to move forward ... I don't want to move backward," he said. He said county administration has been doing the right things while preparing for next year's budget.

Taking into account this year's deficit, cost cutting will leave the county with $15 million in its General Fund heading into next year, according to a staff report.

"Our goal, and I think we've met it so far, is to be in front of the economic issues," board Chairman Leroy Ornellas said. "It's important that we position ourselves to prepare for what appears to be the inevitable."